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Campaign Spotlight: Campaign Seeks to Strike the Right ‘Balance’

May 20, 2013 by Leave a Comment

The campaign, which got under way last week, is the first for the Balance Bar brand since it was acquired by NBTY, formerly Nature’s Bounty, which is owned by the Carlyle Group. NBTY and Carlyle agreed to buy Balance Bar at the end of November from Brynwood Partners, which acquired the brand from Kraft Foods in 2009.

It is hard to say whether brands that change hands often underperform because they have several corporate parents in a short time or whether they keep changing hands because they are already underperforming. Whatever happened with Balance Bar, NBTY executives say they are committed to revitalizing the brand.

“Carlyle is significantly interested in building brands,” says Katia Facchetti, chief marketing officer at NBTY in Ronkonkoma, N.Y. “A great example is Dunkin’ Donuts under its ownership.”

Her reference is to the period from December 2005 through August 2012, when Carlyle, along with two other private equity giants, Bain Capital and Thomas H. Lee Partners, owned Dunkin’ Donuts. During that time, the chain started its successful “America runs on Dunkin’ ” campaign.

The Balance Bar campaign carries the theme “Have you found your Balance?” — yes, “Balance” with a capital B, to reinforce the brand name. The campaign has a budget estimated at $5 million from now through September.

The effort is extensive, including a commercial, magazine advertisements, coupon inserts in newspapers, content on the Balance Bar Web site, online banner ads, ads in stores, a public relations initiative, sampling programs and a presence in social media like Facebook and Twitter.

The creative aspects of the campaign are being handled internally at NBTY. Moosylvania, an agency in St. Louis that worked for Balance Bar under the Brynwood ownership, is continuing to handle tasks that include balance.com and social media. The media buying duties are handled by Havas Media in New York, part of Havas, and 360 Public Relations in Boston is the public relations agency.

NBTY and Carlyle were interested in Balance Bar “to augment our portfolio” in the “active nutrition business,” Ms. Facchetti says, which includes brands like Body Fortress, MET-Rx and Pure Protein.

“There were several things about Balance Bar that made it appealing,” she adds, among them its “latent brand equity” and its “broad consumer base,” despite the lack of significant marketing support.

According to Kantar Media, a division of WPP that tracks ad spending in major media, Balance Bar spent $91,000 last year, $2,000 in 2010, nothing in 2009 and nothing in 2008. The only recent year when there was any ad spending of note was 2011, with $1.4 million.

“People still knew the brand, and loved the product, but it wasn’t top of mind,” Ms. Facchetti says. That was reflected in Balance Bar’s sales, which ranked seventh among the major nutrition bars according to Nielsen data shared by NBTY, coming after Clif Bar, Zone Perfect, Special K Protein Meal Bar, Pure Protein, Power Bar and Kind.

“You always want to support your brand as much as possible,” says Erin Lifeso, senior director of marketing for Balance Bar, who has been working on the brand since early 2010 and moved over to NBTY when the sale was made.

Under Brynwood, the emphasis was on “maximizing shelf distribution, developing new product offerings,” Ms. Lifeso says, and marketing took forms like “sampling events at the grass-roots level and social media.”

“We just didn’t have the spend” for advertising, she adds, which was unfortunate because “if you get people to taste it, they love it, and if you remind them about it, they go buy it.”

The new Balance Bar campaign is being aimed at consumers 25 to 54 years old. To make it easier for the ads to stand out amid the clutter, Ms. Lifeso says, “we wanted to make sure we have an ownable, iconic visual.”

Such an image is a centerpiece of the campaign: a seesaw, or teeter-totter, that is meant to symbolize what Ms. Lifeso calls “our teeter-totter world.”

“Everyone leads busy lives; we run from one thing to the next,” she says, and during a hectic day Balance Bar is intended “to keep you in balance.”

In the commercial, which is 15 seconds long, an animated couple in office attire is seen dashing after a commuter train, followed by the same couple, in athletic gear, exercising. The camera pulls back to show that the man and woman are on a seesaw; they are replaced there by a cookie-dough-flavor Balance Bar.

“Whether you’re running for a train or training for a run, find your balance,” a female announcer says. “Every delicious Balance Bar has 40-30-30 balanced nutrition, to give you energy that lasts.”

On screen, a diagram appears to show what the “40-30-30” refers to: a nutritional formula of 40 percent carbohydrate, 30 percent protein and 30 percent fat, echoing the dietary principles of Dr. Barry Sears, who popularized the Zone diet and brought out Balance Bar in 1992.

The commercial ends with the narrator’s final words: “Balance Bar. Have you found your Balance?”

The print ads take an identical approach, also depicting the couple and using the contrasts of “running for a train” and “training for a run.”

Two additional commercials are being developed, Ms. Facchetti says, and both will also use the seesaw because research among consumers who were shown the first commercial found “it signaled ‘balance’ instantly to them.”

Another benefit was that “you couldn’t put another brand, another bar” in the seesaw spots, she adds, because of how it symbolizes balance.

The tactic of incorporating a brand’s name into a slogan, jingle, theme or other intrinsic aspects of a campaign is a mnemonic device that has become known as “nameonics” on Madison Avenue.

Examples include “Vanguarding,” for Vanguard mutual funds; “Power through,” for Powerade sports beverages; “Zestfully clean,” for Zest soap; and, most recently, “It’s time for a Maacover,” for the Maaco chain of auto paint and body shops, which replaced another nameonics campaign, “Uh-oh, better get Maaco.”

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Article source: http://www.nytimes.com/2013/05/20/business/media/campaign-seeks-to-strike-the-right-balance.html?partner=rss&emc=rss

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Obama to Nominate Economics Professor and Ex-Treasury Official to Fed Board

December 27, 2011 by Leave a Comment

Jeremy C. Stein, a Harvard professor who worked briefly for the Obama administration in early 2009, has particular expertise in the workings of financial markets.

Jerome H. Powell, currently a visiting scholar at the Bipartisan Policy Center, brings private sector experience in the same area. He worked for almost a decade as a partner at the Carlyle Group, a private equity fund. Mr. Powell also served as Treasury under secretary for finance in the administration of President George H. W. Bush.

In a statement, Mr. Obama lauded their “impressive knowledge of economic and monetary policy.”

The nominations end months of waiting for the White House to resume its effort to fill the vacancies after it was forced to withdraw the nomination of an earlier candidate, the Nobel Prize laureate Peter Diamond, because Senate Republicans would not allow a vote.

The inclusion of Mr. Powell, a Republican, could help to smooth the way for Senate confirmation of both nominations this time around. But Senate Republicans are blocking a number of other nominations for vacancies at other financial regulatory agencies.

Article source: http://feeds.nytimes.com/click.phdo?i=b9207cf641fd3ded74951731f4ee96a0

Filed Under: Economy News Tagged With: , ,

DealBook: Buyout Firms to Buy Drug Research Company for $3.9 Billion

October 4, 2011 by Leave a Comment

Jonathan Alcorn/Bloomberg News; Noah Berger/Bloomberg NewsDavid M. Rubenstein, left, co-founder of the Carlyle Group, and Warren Hellman, chief of Hellman Friedman.

7:02 p.m. | Updated

The buyout firms Carlyle Group and Hellman Friedman struck one of the largest private equity deals of 2011, agreeing to buy the clinical research company Pharmaceutical Product Development for $3.9 billion.

The acquisition, which was announced Monday, will pay the company’s owners $33.25 a share, 30 percent above the stock’s closing price on Friday. The deal was a rare bright spot on a gloomy day on Wall Street. Shares of Pharmaceutical Product Development ended up 25.8 percent, at $32.28, on a day when the broader stock market tumbled.

Pharmaceutical Product Development, based in Wilmington, N.C., provides outsourced clinical research and laboratory services to drug companies. It is a hot business. The world’s largest pharmaceutical companies, as their profit margins come under pressure and the cost of getting drugs approved has increased, have gradually shifted some of their research and development activities to outside contractors. Private equity firms are also attracted to these companies for their relatively stable cash flow, allowing the firms to easily borrow money to finance their purchases.

Among Pharmaceutical Product Development’s chief competitors is Quintiles Transnational, a big manager of clinical trials based in nearby Research Triangle Park, N.C. Quintiles has been owned for nearly a decade by private equity firms. Bain Capital, TPG Capital and 3i Group now control the company alongside its founder, Dennis B. Gillings.

Last year, Thomas H. Lee bought InVentiv Health, a pharmaceutical support company, for $1.1 billion. In a recent deal, Avista Capital Partners led the $230 million acquisition of Kendle International, a clinical researcher, and combined it with INC Research, a company in the area that it already owned.

A number of the largest buyouts since the financial crisis have been in the health care industry. In the biggest private equity deal this year, a group of funds led by Apax Partners bought Kinetic Concepts, a provider of wound treatments, for $6.3 billion. In 2009, TPG and a Canadian pension fund acquired IMS Health, a provider of health care data, for $4 billion.

The Pharmaceutical Product Development buyout is welcome news for the private equity business, which has undergone a slowdown in activity as the stock market has swooned and bank shares have tumbled. Carlyle and Hellman needed to tap four banks — Credit Suisse, JPMorgan Chase, Goldman Sachs and UBS — to secure financing for the deal.

The clinical research business has been a boon to North Carolina’s Research Triangle, a cluster of academic and business institutions. The University of North Carolina at Chapel Hill has been a beneficiary of the industry’s success.

Pharmaceutical Product Development, founded 25 years ago by Fred Eshelman, employs 11,000. Mr. Eshelman graduated in 1972 from the pharmacy school of the University of North Carolina, a school that now bears his name after he donated $20 million to the university.

Right next door to the U.N.C. Eshelman School of Pharmacy is the U.N.C. Gillings School of Global Public Health, named after Mr. Gillings, the founder of Quintiles, who in 2008 donated $50 million to the school.

Article source: http://feeds.nytimes.com/click.phdo?i=202c3aed178f79d63d6ac2d12f08bd61

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DealBook: Carlyle Files to Go Public in Next Year

September 7, 2011 by Leave a Comment

David Rubenstein, co-founder of the Carlyle Group.Jonathan Alcorn/Bloomberg NewsDavid M. Rubenstein, a co-founder of the Carlyle Group.

8:48 p.m. | Updated

The Carlyle Group took its biggest step Tuesday toward joining an elite club: private equity giants with public stock tickers. But as the stock and debt markets whipsaw, the timing of an initial public offering remains unclear.

Still, the filing propels Carlyle along the path already trod by several of its biggest rivals, including the Blackstone Group and Kohlberg Kravis Roberts. And it marks the latest step in the evolution of the firm, from a private equity shop with deep ties to political figures to a $153 billion investment titan with hedge fund and real estate arms.

Stocks of private equity firms, to be sure, have generally fared poorly. Blackstone, which priced at $31 in 2007, began tumbling soon after the firm’s offering. They closed on Tuesday at $12.50. And Apollo Global Management, which gained a public ticker in April after having traded on a private exchange, closed on Tuesday at $12.19 — well below its $19 initial offering price.

Despite filing for an initial offering on another volatile day in the stock market, Carlyle is not expected to plunge into unfavorable market conditions, having waited years to go public. But it is currently considering going public by the end of the first quarter in 2012, according to a person briefed on the matter who was not authorized to speak publicly.

Once known for its investments in military contracting, Carlyle has since participated in dozens of big name takeovers, including those of Dunkin’ Brands and Hertz.

The firm has gone on an acquisition spree over the last year to diversify its business beyond its core private equity funds and make itself more attractive to its investors and public shareholders. Among those deals were taking majority stakes in two big hedge funds and in a European fund of funds.

Carlyle, founded in 1987 in Washington, had made little secret of its desire to go public. As far back as 2007, David M. Rubenstein, one of the firm’s co-founders, described it as “a natural candidate to go public.”

Tuesday’s filing, like many initial prospectuses, discloses relatively little about Carlyle’s initial offering plans. Its disclosed fund-raising intention, $100 million, is a preliminary figure meant only to calculate the filing fee. And the voluminous document lacks juicy details like the firm’s valuation or the compensation of its top executives.

Still, Carlyle opened its books to the public a little, showing how yet another private equity firm had bounced back from the lows of the financial crisis. Last year, the firm reported $2.8 billion in revenue and $1.5 billion in net income, both significantly higher than 2009.

Using economic net income, a nonstandard accounting measure preferred by Blackstone and K.K.R., Carlyle earned just over $1 billion.

By comparison, Blackstone reported $3.1 billion in revenue and $485.5 million in economic net income last year.

Carlyle showed even more improvement during the first six months of this year, reporting nearly $2.1 billion in revenue and $770.2 million in economic net income for the period.

Its revenue from management fees has grown 16 percent thanks to several fund acquisitions, while its performance fees have jumped 971 percent because the value of its investments has improved.

Yet it is not clear whether Carlyle can sustain those gains, as the stock and credit markets come under stress from concern about weakening economic growth. Borrowing costs have been rising in recent weeks, threatening to erode the ability of private equity firms to strike lucrative leveraged buyouts.

Carlyle also confirmed that changes to its management structure that reflect its shift from a private partnership to a publicly traded company. Its three co-founders will remain at the top: Daniel A. D’Aniello will become the firm’s chairman, while William E. Conway Jr. and Mr. Rubenstein will be co-chief executives. (Together, the three are known inside the firm as “D.B.D.”)

Many in the buyout industry see the firm’s initial public offering as a way for Carlyle executives to cash out on their holdings eventually, as Blackstone co-founder Peter G. Peterson did in his shop’s 2007 I.P.O. That could eventually allow the co-founders to pass the firm’s reins onto a new generation of leaders, which includes Glenn Youngkin, Carlyle’s chief operating officer.

But initially, major equity holders, including the co-founders and outside investors, will be subject to lock-up agreements. Mubadala, an investment arm of the Abu Dhabi government that took a 7.5 percent stake in Carlyle in 2007 and invested an additional $500 million last year, can begin selling down its holdings in stages after a year. Another is the giant California pension fund Calpers, the California Public Employees’ Retirement System, which took a 5.5 percent stake in 2001.

Peter Lattman contributed reporting.

Article source: http://dealbook.nytimes.com/2011/09/06/carlyle-files-for-an-i-p-o/?partner=rss&emc=rss

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DealBook: Carlyle Is Said to Be in Talks With Energy Buyout Shop

July 8, 2011 by Leave a Comment

The private equity giant Carlyle Group is in talks to acquire Energy Capital Partners, a buyout shop focused on investments in power plants and gas pipelines, according to two people briefed on the talks.

Carlyle’s potential acquisition of Energy Capital underscores the relentless drive by the firm to gather more assets and broaden its product line as it gears up for an initial public offering.

Carlyle, which is based in Washington, is expected to join its rivals the Blackstone Group, Kohlberg Kravis Roberts Company and Apollo Global Management later this year as publicly traded private equity firms.

David M. Rubenstein, co-founder of the Carlyle Group.Jonathan Ernst/ReutersDavid M. Rubenstein, co-founder of the Carlyle Group.

A Carlyle initial public offering would highlight a three-decade transformation of these firms, which were once small private partnerships that bought companies with borrowed money, but are now among the world’s most powerful asset-management businesses.

A deal for Energy Capital would be among the first transactions in which one large private equity firm buys another. Negotiations are continuing and could still fall apart, said these people, who requested anonymity because they were not authorized to discuss it publicly.

Spokesmen for Carlyle and Energy Capital declined to comment.

The firm has gone on a dizzying acquisition spree over the last year to diversify its business beyond its core private equity funds and make itself more attractive to its investors and public shareholders.

It recently took majority stakes in two hedge funds: Claren Road Asset Management, a fixed-income hedge fund with $4.5 billion in assets, and the Emerging Sovereign Group, an emerging-markets manager partly owned by the billionaire investor Julian Robertson. In January, it announced a deal to acquire 60 percent of AlpInvest Partners, a firm that manages about $43 billion for two Dutch pension fund managers.

The AlpInvest deal, which closed last week, gives Carlyle about $150 billion in assets, making it the world’s largest private equity firm as ranked by assets under management.

Carlyle’s acquisitions of new businesses is a departure from the firm’s longtime strategy of developing products from within the firm. Co-founded in 1987 by David Rubenstein, Carlyle runs about 84 separate funds, including an Asian real estate vehicle and a fund focused exclusively on buying Mexican companies. In its core buyout funds it owns businesses that include Dunkin’ Brands, the Hertz Corporation and Freescale Semiconductor.

There are potential problems with Carlyle’s rapid expansion, private equity industry observers say. By slapping its brand on a wider array of products and straying from its core competency, the firm runs a risk.

“The main risk is that Carlyle’s diversification, if not well-managed, could hurt investment performance,” said David Teten, a partner at ff Venture Capital who has published research on private-equity investment management.

Carlyle has already had problems with its diversification strategy. During the financial crisis two of its homegrown hedge funds — Carlyle Capital and Carlyle Blue Wave — collapsed after wrong-way bets in the debt markets.

In some ways, Carlyle’s acquisition binge is an effort to replicate the broad set of businesses built by the Blackstone Group, one of its chief competitors and the first large private equity firm to go public back in 2007. Blackstone, which is run by Stephen A. Schwarzman, has established hedge fund, real estate investment and investment bank advisory units that diversify its revenues.

The other large publicly traded firms, Kohlberg Kravis Roberts and Apollo, have also aggressively added new business lines in recent months. K.K.R. has hired a group of nine Goldman Sachs traders to start a hedge fund and brought on Ralph Rosenberg, a former Goldman partner, to start a real estate business. Apollo acquired the real estate investment group of Citigroup and is also in the process of raising an energy-focused fund.

None of them has yet to acquire another private equity firm, which would make Carlyle’s acquisition of Energy Capital unusual. Energy Capital, based in Short Hills, N.J., was started in 2005 by Douglas Kimmelman, also a former partner at Goldman Sachs. The firm, which manages about $7 billion in assets, has emerged as one of a handful of large private equity funds focused exclusively on the energy industry. It owns a variety of energy assets, including three power plants in New England, electrical lines in Southern California and a gas pipeline being built in Texas.

Energy Capital also owns a small stake in Energy Future Holdings, formerly TXU, which it acquired in 2007 alongside Kohlberg Kravis Roberts, TPG and Goldman for $44 billion in the largest buyout ever. The giant Texas utility has struggled amid persistently low natural gas prices and a huge debt load.

Talks between Carlyle and Energy Capital came as a surprise because of Carlyle’s longstanding relationship with Riverstone Holdings, the country’s largest energy-focused private equity firm. Carlyle and Riverstone, which have co-sponsored six energy and power funds over the last decade, notified their investors in a letter sent last week that they would not raise another fund together and would go their separate ways. Riverstone’s partners have decided to stay independent.

The Carlyle and Riverstone relationship became strained a few years ago when their funds became ensnared by the New York attorney general’s investigation of corruption of the state’s public pension fund by political officials and private equity funds. Carlyle paid $20 million and Riverstone paid $30 million, to resolve their roles in the case.

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